Good Times, Bad Mood

Americans have many reasons for gloom. The war in Iraq has yet to turn around, we can't agree on a solution for illegal immigration, and Lindsay Lohan isn't cute anymore. We also have one reason to be happy: the economy. But right now, we're in the middle of a good funk, and we don't want to let any sunshine spoil it.

When it comes to the economy, the national mood is a combination of dissatisfaction and fear. A recent Gallup poll found that 66 percent of Americans think national economic conditions are "only fair" or "poor." And we remember the old proverb: It's always darkest just before it goes totally black. Fully 70 percent think the economy is getting worse, compared with 23 percent who discern signs of improvement.

In the midst of a recession, a depression or the Irish potato famine, our morose outlook would make sense. But at the moment, it seems to have no basis in reality.

Unemployment stands at 4.5 percent, down from the peak rate of 6.3 percent four years ago. The stock market is near record levels. Economic growth, which slowed in the first quarter, has since rebounded. Inflation is running below 3 percent. But to paraphrase the old country song, we've enjoyed as much of this as we can stand.

It's true that not all the economic news is golden. Some people are out of work or drowning in debt. Gas prices are painfully high. People who expected their home values to keep climbing, no matter what, are learning the definition of the term "bubble." Health care and college costs, however, seem permanently immune to the law of gravity.

But even in the best of times, some trends fall below average. Taken as a whole, the economy is plenty healthy. So why do we insist on seeing it as sickly?

One reason is that we've gotten so accustomed to prosperity that we take it for granted. From 1971 through 1997, the unemployment rate never once fell to the level we now enjoy. In the 1970s, annual inflation was frequently in double-digits. Recessions used to come along every four or five years, but since 1991, we've had only one downturn, a mild one back in 2001.

Another reason for the pessimism is that we mistake the few bad indicators for a broad trend. When gas prices soar, it's tempting to conclude that we're on the verge of economic turmoil so awful that we will soon be eating tree bark to stay alive. Never mind that other prices are reasonably stable, and that the national economy has absorbed higher fuel costs without too much strain.

In one sector where prices have been dropping, of course, the trend is taken as cause for panic: home sales. But what is bad for home sellers is good for home buyers. Most of us are both, which makes the whole phenomenon pretty much a wash.

A major cause of the misperception, though, is President Bush's sagging popularity. It's clear that many people let their discontent with the president color their view of everything. If he is failing to win the war in Iraq or curb illegal immigration, we assume he must also be coming up short on the economy.

The polls suggest that some people won't acknowledge anything good here lest it suggest competence on the part of a president they can't stand. According to a survey by the Pew Research Center for People and the Press, 43 percent of Republicans say the economy is fair or poor, but 79 percent of Democrats take that view. "People are giving partisan responses," says public opinion expert Karlyn Bowman of the American Enterprise Institute in Washington.

This is an error on two counts. The first is that even if George W. Bush were completely incompetent on matters related to our money, which he is not, presidents don't have that much power over the fortunes of the economy. The second is that it's entirely possible for a president to handle one area of policy badly and another one well -- just as a baseball player can be a star at the plate and a klutz in the field.

For a variety of reasons, we just can't be happy with our current prosperity. When things eventually change, trust me: We may not miss Bush, but we will really miss the good times.

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